IE Business Daily Business news for the Inland Empire.
Retail might not perform as well in 2015 as first expected.
The National Retail Federation originally predicted sales would grow 4.1 percent this year compared with 2014, but Wednesday it lowered that estimate to 3.5 percent, citing “unexpected” slow economic growth during the first quarter.
The federation calculated that sales grew 2.9 percent during the first half of 2015, and predicted that sales will grow 3.7 percent during the next five months, according to a statement released Wednesday.
That figure includes general retail sales and non-store sales but does not count automobile sales, gas stations and restaurants.
In a statement, federation chief executive officer Matthew Shay blamed the slowdown on the federal government.
“For years consumer spending has been hampered by lackluster growth in our economy,” Shay said. “Much of that blame can be shifted to Washington, where too much time has been spent crafting rules and regulations that almost guarantee negative consequences for consumers and [U.S.] businesses alike.”
One local economist agreed.
“That’s quite a drop,” said Jay Prag, professor of economics and finance at the Drucker School of Management at the Claremont Colleges, regarding the forecast change. “This recovery has been so slow, and people are still worried about their jobs lasting for a long time, so they’re not spending as much money.”
The Affordable Care Act, or Obamacare, is also having an impact, Prag believes.
“People are getting [health] insurance, but they’re also paying higher premiums,” Prag said. ‘That’s money out of their pocket, which means they don’t have as much disposable income.”
